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The Sweetest Thing: An 8(a) Certification

The SBA’s 8(a) Business Development certification benefits are amazing. With an 8(a) designation, you can receive government contracts for up to $4 million for goods and services, and up to $7 million for manufacturing. You’re able to form joint ventures and teams to bid on contracts, and 8(a) companies have access to the Mentor-Protégé program which can help you learn from more experienced business owners. But the 8(a) program isn’t for everyone. In fact, this program is specifically limited to those who can demonstrate economic and social disadvantages, and you have to prove you qualify.

Suppose Bono, lead singer of mega-band U2, wanted an 8(a) designation. Here are 10 reasons why the SBA might reject Bono’s application:

  1. He has more than $250,000 in savings and/or brokerage accounts.
  2. He isn’t working full time at his 8(a) company.
  3. He does non-profit work at his 8(a)-application company.
  4. Between tours, residuals, and investments, his Adjusted Gross Income (AGI) over the last three years averaged more than $250,000.
  5. Although he has fewer than 500 employees, his firm has more than $7.5 million in average annual receipts which eliminates any chance of being classified as a small business.
  6. Even though he isn’t a billionaire, he is among the world’s highest paid musicians and depending on the year, more than 70% of his revenue comes from a single source: touring.
  7. As a straight, white male, Bono would struggle to demonstrate proof of personal social disadvantage.
  8. With his Facebook investments and other income sources, there is evidence of multiple revenue streams outside of the firm associated with his application.
  9. Bono might not submit all of his documentation in its entirety.
  10. He is not a US citizen.

Other reasons an application might be declined include parole or probation, having a partnership with another 8(a) firm, not having a positive net income, or defaulting on a federal debt from a mortgage or a student loan.

Just because Bono wouldn’t qualify for the 8(a) program, it doesn’t mean that you don’t have a chance. If you still haven’t found what you’re looking for with your 8(a) application, spend some time with Cayenne Consulting to see if you are eligible. Learn more about our SBA certification services or follow us on Facebook for more tips to grow your business the smart way.

Business planning specialist with startup expertise devoted to helping small businesses launch and prosper through VC grade business plans, financial models, and branding packages. I also have a personal mission to advocate for persons of color and women business owners through small business certifications enabling them to work with larger corporations and government entities. View details.

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